Richard Musty (RM) is the country manager and head of retail at Lloyds Banking Group in the Middle East. Mr Musty, who joined Lloyds TSB in 1989, is also a father of two teenage children, a 14-year-old daughter and son, 16.
Dan Britton (DB) is the author of The Financial Fairy Tales series of children's books, which help children to learn about money, enterprise and the business of life through fun and engaging stories.
At what age should parents begin equipping their children with the financial skills they need for managing their own finances at university?
DB It's never too early to start. For university preparation, parents should sit down and have a "finance meeting" with their children. This can consist of drawing up a list of income and likely expenditure. This will allow the student to see the big picture of how much they will have to spend or be required to earn.
What financial advice should parents offer to their offspring?
RM Getting budgeting right at an early stage can make all the difference between having a stressful student life or a more comfortable one. As a way to practise, why not try this: next time you are heading on holiday, give your children a set amount of spending money for the holiday. Rather than buying them sweets and entertainment each day, it gets them into the budgeting way. I have done this with both my children and they have a renewed sense of financial understanding at the end of it.
What is the first financial step a new student should take when they arrive at university?
RM Open a bank account. Usually this will include a current account for daily transactions and possibly a savings account, which will earn a slightly higher interest rate on more substantial deposits of cash. Credit cards for students need to be used carefully and not as a means of borrowing. Make sure you can pay off the balance in full each month. Debit cards, on the other hand, are fine because they only allow you to spend what you have in your account. They are a convenient substitute for cash. Remember, there is lots of advice available from your bank's student account manager and the student finance officer at the university - do not be afraid to ask for help.
Should students shop around for the best undergraduate account?
RM Yes, absolutely. Many banks offer students additional perks and benefits as an incentive to banking with them, such as a free gift or a discount in certain outlets, for example. When deciding who to open your account with, as attractive as perks and benefits can be, it's important to consider the rate of return you are earning, the quality of the service that you are getting and the financial strength of the institution to make sure your money is safe. Students tend to stick with the same bank for life, so choose wisely to ensure you are banking with someone who understands your current needs, as well as guide you through your financial life stages as these needs evolve.
If a student gets into debt, how should they manage that debt without simply running to the bank of mum and dad?
DB Being in debt is like being overweight. To lose weight a person needs to consume less and exercise more, ideally both at the same time. To reduce debt, a person needs to spend less and earn more. So some financial discipline on spending plus seeking a part-time income from a job or enterprise will eventually reduce the debt. Part-time jobs give students valuable experience and the ability to gain a reference. Students can also consider some kind of business enterprise, even if it is babysitting or mowing lawns.
How careful should students be about not only paying attention to their finances now, but also in the future?
RM University loans are one of the most common and significant forms of debt that people face in their adult life. There is no doubt that an education is an investment and graduates often reap the rewards during the course of their careers, but don't neglect to plan when your first paycheque arrives. All too often, the temptation can be to just spend all your income, but careful budgeting and planning skills will be essential here in helping you to clear your debt as soon as possible and starting to plan for your future.
What websites would you recommend that can help students to learn how to budget?
DB Try www.pfeg.or.uk and mint.com, which both offer free financial software.
